Tuesday, July 24, 2007

The Best 401K Plans

A few years ago I was interviewing for a position with VISA. The position I was interviewing for was so-so, and in the end I didn't get it. I was told I was over qualified, which I was, but that's a story for another day. I got pretty far along in the interview process, and at one point the HR person discussed compensation and benefits with me. The compensation was nothing to write home about, but the benefits were pretty amazing. At the time, VISA's 401K plan included a 4:1 match up to 6% of salary. To date, these are the best 401K benefits that I have heard of. Recently I interviewed someone who was working for VISA and was thinking of leaving. The person told me that the golden age of the VISA 401K was over and that benefits have been sharply reduced. He did not share the details.

A relative of mine joined Boston Consulting Group after finishing his MBA. When I asked him what the company match to his 401K was, he said that there was none. The company simply contributed the maximum amount permissible to each employee's 401K account. No contribution from the employee was needed. That is the second best 401K plan I have heard of. Of course, the downside to this contribution structure is that the employee doesn't get a chance to contribute even more towards his own retirement plan. Actually, I am not sure whether employees were prevented from adding to the amount contributed by the company. Regardless, we are still talking about a lot of free money.

This is where I open up the floor for discussion and comments. I am asking my readers to tell me about the best 401K plans out there. Let's see if we can create a list of the best retirement plans offered by ordinary employers. Call it the "Best Companies for Future Retirees" list. All viable suggestions will be added to this post with a link to the appropriate blog.

34 comments:

Anonymous said...

eThat's odd, on their company site, they say they only offer a 2:1 for 6%. I'd be interested to know what funds they have available.

Shadox said...

Not sure which company you are referring to. If it's VISA - as I mentioned, I recently found out that the benefits were sharply reduced from the 4:1 match. Maybe it was sharply reduced to 2:1. That would still be exactly 4 times better than my own company's match.

I am not sure what funds they offer.

beth said...

This is certainly not the best, but my company matches 100% for the first 3% of the employee's salary, and then 50% for the next 2%. Thus, if I put in 5%, I get a 4% match, as the maximum. However, we have the Roth 401(k) option, too, as well as some index funds in our options.

I don't know much about investing, so as I'm now starting to learn, I'm actually more impressed with my employer's plan in terms of options. Then again, my company does consulting to figure out benefits, so it wouldn't look good if we'd see our clients getting better plans...

Anonymous said...

This is a very interesting post. My company is a large global financial firm. We are matched 100% on the first 3% of salary which I think is somewhat standard. (To be technical, based on the way it's worded, you have to contribute 4% to get the max.) However, at the end of the year we also get a lump sum contribution of 3% of base salary which is called a retirement contribution. This contribution vests after 5 yrs. of service whereas the 401k match vests immediately. Wondering if other companies had something similar.

Anonymous said...

I work for a tiny non-profit... and they give 6% to my 401k whether I match or not.. which means that I can guilt-free split my contributions between my 401k and a Roth.

Shadox said...

That's pretty awesome. I wish we all had that sort of arrangement.

My company is now considering increasing our corporate match to 6% starting Jan 1st. Keeping our fingers crossed.

Anonymous said...

Anton Airfood matches the first 3% and half the second, that's not bad, but they also allow you to cintribute 36% total, so the tax savings is pretty huge (if you can afford to max it). However, they're being bought up pretty quickly, and the buying companies' 401ks aren't nearly as sweet.

Anonymous said...

Although I am not sure if it is technically a 401k, it is the same sort of thing but for a smaller company.

25% of salary straight up contributions by the company.

http://www.bit-sys.com/benefits.jsp

Anonymous said...

ok..
My company offers $1.25 per each $1.00 that i put in up to 5%

Im currently at 10%

Anonymous said...

Our company offers 50 cent match on the dollar up to 15% of earnings. Love it and save 22.5% a year for retirement

Anonymous said...

Very few posters are naming names. I was hoping to find a list of "best companies for 401k plans"

Anonymous said...

New post to an old article but I've heard that the "max contribution" is a limit on YOUR contributions and not the company's. I can't seem to get verification of this online or from anybody one way or the other. If its true, Boston Consulting Group should allow the contributions of employees up to 15.5K (for year 2008 i think?)

Anonymous said...

Found online source to backup the max contribution limit is imposed on employee and not employer. However, the employer does seem to be limited to a maximum of 6% of the pre-tax salary according to the same source.

Under that rule 2:1 @ 6% would appear to be in violation?

http://www.todaysseniors.com/pages/401k_contribution_limits.html

Anonymous said...

A Major News Company I work for contributes 1:1 up to 4% match, fully vested after 4 years.

TechOps Analyst said...

Comcast Corp. = 100% match for the first 6% & Fully vested immediately.

Anonymous said...

Well Nokia is not a US company but they do match 1:1 up to 8%.

Anonymous said...

wow 4:1 No wonder visa is tanking!

http://www.dhantube.com

www.konapage.com said...

Home Depot contributes $1.50 for every dollar up to 3% and .50 up to 5%

Anonymous said...

my company will give me 3% automatically even if I do not contribute. Then as long as I put in 2%, I can get up to 12% through profit sharing.
2% to get 15% seems like a no brainer.
Also the company has never given less then 10% combined

Anonymous said...

Large aerospace company
100% match up to 8%

Cesar said...

I work for a contractor, Kiewit Pacific and we get matched 100% the first 6% then we get an additional 4% of our salary match at the end of the year...so essentially I put in 6% and get 10% from my employer....we are fully vested after 5 years.

Anonymous said...

I work for a student loan company, we get 6% with no contribution and then they will match 100% of 2% so if you put in 2% you get 10%

Shadox said...

Anon - That's an awesome deal! Congrats to you!

Anonymous said...

http://www.qualcomm.com/careers/pro/us_sd/benefits.html

Company match of employee contribution: 100% on first $1,500, 50% on next $1,500, 33% on next $7,500, and 10% thereafter 50% vested after 1 year, 100% after 2 years
------------------------

That's what I have currently. I'm currently maxing out since this plan really rewards you for every dollar you put in. As a nerd, it feels strange to leave free money on the table. This is works out to be just over 32% if you put in the current max of 16500 (in 2009/20010). By far the best 401k plan I've ever had (worked for some big-name companies, but QC has the best 401k plan), but still pales in comparisson to Visa even in Visa's neutered 401k form.

Found this online. Would like to hear from people who actually work at one of the following companies because these plans just seem unreal:
http://www.usnews.com/money/blogs/planning-to-retire/2009/3/30/the-30-companies-with-the-best-401k-matches.html

Anonymous said...

Check out SunBird Opportunity Funds. They have invented a new investment plan, call the SMIRF, or Supplemental Membership Income and Retirement Fund. It starts paying you now with one low membership fee. Visit sunbirdfunds.com

Anonymous said...

For the record, if Boston Consulting Group or any other employer contributed the "maximum" to your 401k, you would still have to put in your "maximum" contribution to reach the full "maximum."

By law the maximum contribution is a set amount, for 2010 it's $49,000. The maximum employer contribution is that amount minus the maximum employee contribution, which for 2010 is $16,500.

So, in 2010, the most an employer can contribute to your 401k is $32,500. But to reach the "maximum 401k contribution" amount, you would have to also contribute your $16,500 portion.

Anonymous said...

Large oil refinery, 100% match up to 7% of salary.

Anonymous said...

Amgen contributes 5 percent automatically. They then match the next 5 percent dollar for dollar. If we contribute 5 percent we get a total of 15%.

Anonymous said...

Scandinavian Bank. Dollar-for-dollar match up to 10% + we have a defined benefit pension plan.

bearrw said...

BP 100% match up to 7% of gross.

bearrw said...

bp 100% up to 7% of gross.

Goodfella0510 said...

Our Plan at Jennmar Corp is incredible.

$1.25 for every dollar up to 12%!

Of course I am contributing 12!

6- year vesting schedule.

Show me that free money baby!

Eric
KY

Justin McElhattan said...

Industrial Scientific Corporation (www.indsci.com) matches employee contributions at 2:1 up to 8%.

We have also been looking for a comprehensive list with the best plans in the country but haven't come up with much. Thanks for the posts.

Eric said...

I work for a small IT/engineering contracting company, less than 60 employees. The percent match fluctuates each year but has been in the high 70's to mid 80's for ten years. Employee contribution max is the IRS limit 16.5k and 22k(over 50).
Fully vested in 5 years.